Esken Limited (Overseas Company Number FC041629), Re

ICC Judge Burton:

1. Paragraph 22 of Schedule B1 to the Insolvency Act 1986 (the “Act”) provides that a company or the directors of a company may appoint an administrator. Paragraph 111 of Schedule B1 defines a company to include one not incorporated in an EEA State but having its centre of main interests (“COMI”) in a member State (other than Denmark) or in the United Kingdom.

2. Esken Limited (“Esken”), a Guernsey-incorporated non-cellular company, entered administration in England on 21 March 2024. The appointment was made pursuant to paragraph 22 of Schedule B1 to the Act by Esken’s directors filing with the court documents containing prescribed information. They were filed in England on the basis that Esken’s COMI is in England.

3. Almost all of Esken’s assets were realised during its administration. The Joint Administrators considered it appropriate to conclude the administration by converting it to a liquidation during which the liquidators would be able to disclaim a leasehold interest in a plot of land with potential environmental liabilities.

4. The Joint Administrators determined that the requirements of paragraph 83 of Schedule B1 to the Act were satisfied and on 17 March 2025, filed a notice with the Registrar to move the company into creditors voluntary liquidation. The notice was registered on 21 March 2025.

5. The only matters now outstanding in the estate include reviewing claims, making distributions to creditors and taking steps to wind down or dissolve Esken in Guernsey.

6. The application before me seeks an order pursuant to Rule 21.4 of the Insolvency (England and Wales) Rules 2016 (the “Rules”): “confirming the creditors’ voluntary winding up of Esken entered into on 21 March 2025”.

7. The reason this seemingly straightforward, procedural request has led to a written judgment is because of the wording of the Act in relation to the winding up of a company whose registered office is outside the United Kingdom. Section 221(4) of the Act provides that: “No unregistered company shall be wound up under this Act voluntarily, except in accordance with the EU Regulation”.

8. How does this fit with the procedure set out in paragraph 83 of Schedule B1 to the Act pursuant to which a company may move, almost seamlessly, from administration to creditors’ voluntary liquidation?

9. The court was taken to a decision of Chief Registrar Baister in the matter of Re TXU Europe German BV [2005] BCC 90 where, applying Re BRAC Rent-A-Car International Inc [2003] BCC 248 , the Chief Registrar concluded that Article 3 of the EC Regulation on Insolvency Proceedings 1346/2000 gave the court jurisdiction to open insolvency proceedings in respect of companies with registered offices in the Netherlands and the Republic of Ireland but with their COMI in England. He held that such proceedings could include voluntary winding up. However, there are significant features which potentially distinguish that case from the one before me: i) it was decided whilst the UK was still a member of the European Union; ii) it concerned a different Regulation from EU Regulation on Insolvency Proceedings 2015/848 (the “Retained EU Regulation”) which now comprises assimilated legislation in this country. Taking effect as it did, before Brexit, the EC Regulation performed an entirely different function to the Retained EU Regulation; and iii) the application before the Chief Registrar concerned the liquidation of foreign registered companies commenced by special resolutions purportedly passed pursuant to section 84(1) (b) of the Act and not, as in the case before me, a voluntary liquidation following an administration and arising as a result of a notice sent to the Registrar of Companies being registered.

10. It is this third distinguishing feature which, in my judgment, provides the answer to the question of how to reconcile the potentially prohibitive provisions of section 221(4) of the Act concerning unregistered companies, with an overseas company that has its COMI in England and moves from administration to liquidation pursuant to paragaph 83 of Schedule B1 to the Act .

11. Paragraph 83 of Schedule B1 to the Act provides: “83(1) This paragraph applies in England and Wales where the administrator of a company thinks— (a) that the total amount which each secured creditor of the company is likely to receive has been paid to him or set aside for him, and (b) that a distribution will be made to unsecured creditors of the company (if there are any) which is not a distribution by virtue of section 176A(2)(a). (2) … [Scottish provisions] (3) The administrator may send to the registrar of companies a notice that this paragraph applies. (4) On receipt of a notice under sub-paragraph (3) the registrar shall register it. (5) If an administrator sends a notice under sub-paragraph (3) he shall as soon as is reasonably practicable— (a) file a copy of the notice with the court, and (b) send a copy of the notice to each creditor, other than an opted-out creditor, of whose claim and address he is aware. (6) On the registration of a notice under sub-paragraph (3)— (a) the appointment of an administrator in respect of the company shall cease to have effect, and (b) the company shall be wound up as if a resolution for voluntary winding up under section 84 were passed on the day on which the notice is registered. (7) The liquidator for the purposes of the winding up shall be— (a) a person nominated by the creditors of the company in the prescribed manner and within the prescribed period, or (b) if no person is nominated under paragraph (a), the administrator. (8) In the application of Part IV to a winding up by virtue of this paragraph— (a) section 85 shall not apply, (b) section 86 shall apply as if the reference to the time of the passing of the resolution for voluntary winding up were a reference to the beginning of the date of registration of the notice under sub-paragraph (3), (c) section 89 does not apply, (d) sections 99 and 100 shall not apply, (e) section 129 shall apply as if the reference to the time of the passing of the resolution for voluntary winding up were a reference to the beginning of the date of registration of the notice under sub-paragraph (3), and (f) any creditors’ committee which is in existence immediately before the company ceases to be in administration shall continue in existence after that time as if appointed as a liquidation committee under section 101.”

12. I have already summarised the provisions of paragraph 111(1A) of Schedule B1 in relation to Esken’s entry into administration. The full text of the paragraph is: “In this Schedule, “company” means— (a) a company registered under the Companies Act 2006 in England and Wales or Scotland, (b) a company incorporated in an EEA State, or (c) a company not incorporated in an EEA State but having its centre of main interests in a member State (other than Denmark) or in the United Kingdom. (1B) In sub-paragraph (1A), in relation to a company, “centre of main interests” has the same meaning as in Article 3 of the EU Regulation.”

13. I am satisfied on the evidence of Ms Kennedy, one of the Joint Liquidators, that Esken falls within the third sub-paragaph: it is a company not incorporated in an EEA State, but it does have its COMI in the United Kingdom. Ms Kennedy explains that Esken’s main operations were in England, that it conducted the administration of its interests on a regular basis in England and that this was known to its key creditors and ascertainable by third parties.

14. Applying this definition of “company” to paragraph 83 of Schedule B1 to the Act , it can be seen that it expressly permits a company such as Esken to enter voluntary liquidation by the novel route there prescribed.

15. In my judgment, there is no need for this route into administration to be reconciled with the provisions of section 221(4) . Section 220 defines “unregistered company”: “For the purposes of this Part “unregistered company” includes any association and any company, with the exception of a company registered under the Companies Act 2006 in any part of the United Kingdom”.

16. The reference to “this Part” is to Part V of the Act titled: “Winding up of unregistered companies”. Part V concerns the winding up of unregistered companies by the court. The only reference in Part V to the voluntary liquidation of such companies is at section 221(4) where, as I have noted, provision is made for them not to be wound up voluntarily “except in accordance with the EU Regulation”.

17. Section 221(5) sets out the circumstances in which an unregistered company may be wound up: “(a) if the company is dissolved or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs; (b) if the company is unable to pay its debts; (c) if the court is of the opinion that it is just and equitable that the company should be wound up.”

18. There is no provision for the winding up of an unregistered company as a means of exiting administration. The provisions of Part V of the Act do not overlap, interact with or duplicate the provisions of Schedule B1 (which is incorporated by section 8 into Part II of the Act ). Part V simply does not apply when a company such as Esken with its registered office overseas but its COMI in England moves from administration to voluntary liquidation.

19. Looking briefly back at the provisions of section 221(4) in Part V of the Act , it is not clear to me how an unregistered company may be voluntarily wound up in accordance with the Retained EU Regulation. Article 1A of the Retained EU Regulation provides that there is jurisdiction to open insolvency proceedings listed in article 1B where the proceedings are opened for the purposes of rescue, adjustment of debt, reorganisation or liquidation and the debtor’s COMI is in the United Kingdom. Article 1B includes: “creditors’ voluntary winding up with confirmation by the court”.

20. Does this mean that there is only “jurisdiction to open” a creditors’ voluntary liquidation of an unregistered company with its COMI in England once the court has confirmed it? Or is it necessary to read into the Retained EU Regulation the word “subsequently” so that it refers to a creditors’ voluntary liquidation being validly commenced, even if it is only subsequently confirmed by the court? What if it is not subsequently confirmed by the court?

21. These questions may come before another court in relation to a different set of circumstances. As for the application before me, for the reasons set out above, applying the statutory definition of “company” in paragraph 111 to paragraph 83 of Schedule B1 to the Act , in my judgment, Esken validly entered creditors voluntary liquidation on 21 March 2025 when the notice filed by its former administrators was registered by the Registrar of Companies.

22. Rule 21.4(1)(b) of the Rules applies where: “a company has moved from administration to creditors' voluntary winding up in accordance with paragraph 83 of Schedule B1.”

23. Rule 21.4 continues: “(2) The liquidator may apply to court for an order confirming the winding up as a creditors' voluntary winding up for the purposes of the EU Regulation.

24. The remainder of the rule sets out the information which must be included in the liquidator’s witness statement and the documents that must be filed with the court. The Applicants have provided the requisite information and documents, save for details of the date on which the resolution for voluntary winding up was passed. In this case, paragraph 83(6)(b) of Schedule B1 to the Act provides that the company shall be wound up as if a resolution for voluntary winding up under section 84 were passed on the day the notice is registered. Details of the day when the notice was registered have been provided.

25. In these circumstances, I am content to provide a certificate confirming Esken’s voluntary liquidation. END